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Friday, January 10, 2014

Volume 3 | Issue 7

Banished

In Fresno, a rare total de-listing of three stations from the Nielsen ratings.

Though the three stations affected weren’t subscribers. The July 8 NOW told you about “six media-affiliated diaries” being tossed from the in-tab of the Spring 2013 Phase II Arbitrends. Ratings were affected for Ostlund-owned AC “K-Jewel 99.3” KJWL and “940 ESPN” KFIG. Also for Fat Dawgs 7 Broadcasting-owned “Oldies 1430” KYNO. Then-ratings supplier Arbitron revised and re-released those Arbitrends, minus the six diaries. Now things have progressed, with those same three stations being de-listed from the Fall (not the Spring) book. Here’s the comment from the research company – “Nielsen Audio is committed to the highest standards of integrity in our data and our panels. We work closely with our clients to uphold and maintain these industry standards and policies.” Nielsen employs a screening question about media affiliations, and more than one radio broadcaster has faced temptation.

Yes, radio’s “time spent” is down 30% over the past five years, but…

Is that at least partly due to PPM? Several NOW readers ask, after digesting yesterday’s lead story from the Borrell Associates “Future of Legacy Media” report, how much of the 30.6% drop in time spent between 2008 and 2013 derives from the introduction of Arbitron’s PPM in the top 50 markets. The time period coincides, exactly, with Arbitron’s phased rollout of electronic measurement. And here’s why they think that – by going with PPM, radio traded time spent listening (TSL) for cume (reach). Arbitron spent a lot of time educating users about how radio’s reach was an important story – that other media successfully used it, and thus radio could, too. But now some folks are wondering if that bargain makes the medium look bad in comparison to competing “legacy media” like TV, which didn’t change their methodology. Borrell cites “Veronis Suhler Stephenson 2012” and its own work in 2013 for the radio stats on the chart named “Winners and losers in time spent.”

Borrell reports radio is not alone.

It says "daily usage of traditional media is down by one-fourth or more" since 2008. Borrell Associates EVP Kip Cassino is the primary author of the 42-page research report, and he says that since Internet access hit critical mass, “the future ain’t what it used to be.” Now he says that over the past five years, “about 25 minutes of daily time spent has shifted from newspaper, TV, radio and other legacy media. While time spent with digital (online and mobile) media has increased by 27 minutes per day.” for “a net gain of just 1.7 minutes.” He predicts “an acceleration of trends, with a dramatic decline in time spent, dropping 19 minutes per day as media consumers say ‘enough!’” You’ll remember that Cassino said radio was “treading water” (not so bad). Some other thumbnails from Borrell – newspapers are “stabilizing,” though Cassino calls it “a fragile stability.” As for the tube, Kip says “the shrinking audiences and higher CPMs [cost per thousand] that were the harbingers of the newspapers’ fall from grace can now be seen with broadcast TV.” Watch Gordon Borrell’s breezy introduction video (literally “introductory” – he walks you through his front door) and download the executive summary of “Future of Legacy Media” here.

More Questions about radio for 2014 –

• Will Cumulus continue spinning off smaller-market stations? Last year it did the 50-plus station transaction with Townsquare Media that funded its purchase of WestwoodOne, and CEO Lew Dickey continues to talk up the advantages of larger markets. There’s some Rumor Mill talk of Cumulus chatting with a former group head about his taking some Cumulus stations in markets outside the top 100. Which leads to this question –

• How many returning owner/operators will we see in 2014? Folks like Dan Savadove, who founded and then left Main Line. And Bill Figenshu, the former Viacom/CBS exec who’s been advising Peak Broadcasting. They’re seeing the same signs that Larry Wilson is at L&L Broadcasting – multiples dropping, and revenue that appears to be steadily trending up low single digits. That’s enough to get some equity guys paying attention. And that leads to a third question -

• Will more equity players turn back toward radio? L.A-based Oaktree Capital has been a steady hand since about 2007-2008. Its investing thesis was small markets plus digital. The idea is that small markets are closer to their communities and less susceptible to having advertising (particularly national advertising) romanced away by digital. Other investors may have different theses, preferring, like CBS and Cumulus, to focus on larger markets. To paraphrase the old proverb about politics, money is the mother’s milk of investing, and radio hasn’t seen much of it lately, from the outside. Even Larry Wilson’s growth, in partnership with Oregon-based Endeavour, has been possible due to Larry’s own ability to write a check, and to enroll other returning players like “Doc” Fuller. In 2014, can radio pull in more pockets of capital?

Emmis radio revenues up 0.4% - but “ex-political,” would’ve been up 4%.

That’s a phrase you’ll be hearing lots of times when other broadcast companies report their latest quarters – “ex-political.” That’s because the last months of 2012 were ripe with political money for many operators, and the category now matters that much. The fiscal third quarter that Emmis reported yesterday covered the prime months of the 2012 campaign – September, October, November. Overall, CEO Jeff Smulyan confesses on yesterday’s call that “we were actually a little below our markets in Miller Kaplan” for the quarter. But later on, CFO/COO Pat Walsh explains that Emmis stations outpaced their markets in L.A., Indianapolis, Austin and St. Louis. And we get a sideways peek at the Miller Kaplans, because Walsh says “revenues in radio markets where Emmis competes were down 1.2% in the quarter.” More about revenue trends for Emmis – national was down 13%, while local improved 2% and digital jumped double digits, up 16%. The national story is another storyline, like “ex-political,” to watch during the upcoming round of earnings reports. Investors liked the Emmis story and the numbers – “EMMS” stock grew 25 cents, or 8.5%, to close at $3.17 a share. It didn’t hurt that Smulyan reported nice growth in publishing, and says “we had a very, very good December, and pacing for January and February is very encouraging.” He’s thinking mid-single digits growth for this current fiscal quarter, “and maybe even a little bit better.” After all – he’s now past the political “comps,” or comparisons.

“Terrestrial radio has a great ability to compete in the car.”

Jeff Smulyan is a born optimist (though he says “it’s hard to be a Pollyanna about our industry growth”). On the subject of radio in cars and FM chips in smartphones from Sprint, and Sprint-related Virgin and Boost, he’s definitely optimistic. His perspective on in-car threats by broadband is driven by cost. He’s been preaching for years that somebody’s got to pay for the bandwidth that connects all the nifty services that the car companies want to sell to carbuyers. He says “when you put in 4G systems in a car you realize…that’s probably another $50 to $60 a month to the consumer.” He likes “the advantage of being free” – but only “if we can do our job as an industry and provide a compelling consumer experience.” Smulyan’s also bullish on the Emmis-developed NextRadio app and TagStation, which help the FM chip come alive and become interactive. Although in the back room -

“Some of our larger industry partners” in NextRadio are slow-pay.

Jeff Smulyan’s not naming names, and he says it’s a matter of “some timing issues of a couple of companies that have not made their payments” as part of the industry’s commitment to Sprint. Radio’s compensating Sprint for breaking ranks with the other wireless carriers and activating an FM ship in its newer-model smartphones. Smulyan, like a band-parent doing collections for candy-bar sales, is now making his friendly collection calls, and says “we’re working through that.” He tells his investor call that “the biggest challenge in this” is creating an inventory system for the spots that stations are offering as part of their commitment to Sprint. He admits that “I wish we had not been the people that set up the system, because I think there are others who are maybe more equipped.” But he says “the reality is, we’re getting it all done.” He admits to some frustration about other companies’ buildout of TagStation, which enhances the user experience, showing album art, etc. in the display. (More about TagStation’s capabilities here.) But Jeff says “automakers have looked at NextRadio and said Wow, this is it.” It’s one of the things he hopes attendees at this year’s CES remember, when they get home from Vegas and unpack. Same for buyers of Sprint, Virgin and Boost phones – they’ve now got “portable radios.” Smulyan reports 110,000 activations, and high user satisfaction (4.2 out of a 5-point scale at the Google Play store).

Quote of the day –

“It’s not soup until it’s soup, and it’s not soup.” Emmis CEO Jeff Smulyan quotes the old proverb about a process being underway, answering the investor question about potential partnerships with private equity. He says “we are having some interesting discussions in a few areas.” But so far, “it’s not soup.”

Bob Grant will be honored this weekend by WABC New York (770).

New Cumulus PD Craig Schwalb announces a special tribute to air Saturday afternoon at 5pm Eastern time and again Sunday at 4pm. Bob died on New Year’s Eve at age 84, and the encomiums continue to flow from radio folks. WABC’s making the tribute available for download, here. There’s a prayer service for Grant, born Robert Ciro Gigante, tomorrow morning at 10 at the Branchburg Funeral Home in New Jersey. Viewing hours are tonight and tomorrow before the service. Bob asked for memorial contributions to be made to the Young Americas Foundation in Herndon, VA or the New York Police and Fire Widows and Childrens Benefit Fund.

Watching the FCC –

◊ A shrinking number of Low Power FMs and translators. But not AMs. Analysis of the FCC’s latest Broadcast Station Totals produces these results, from the NOW smartphone calculator function and a lot of back issues – Two years ago, there were 838 licensed Low Power FMs. A year later, at the end of 2012, there were 809. As of December 31, 2013 – just 776. While there were a surprisingly low number of filings (about 2,800) submitted in the most recent LPFM window, it’s clear the field is about to see a sharp turnaround in numbers this year. As for translators, so popular in station trading – two years ago there were 6,099 and one year ago, 6,075. Now – 6,054. Experts tell this NOW Newsletter they think the golden age of creating new translators is over, likely leading to more competition for the ones that are still available, and higher prices. As for the “senior band” – the number of licensed AMs remains fairly steady. The two-year trend is 4,766 to 4,738 and now 4,727. Still no sign of a massive signoff/turn-in of licenses. Although the FCC statistic doesn’t show you the number of AM, FM and other licenses that companies are keeping silent under STA (special temporary authorization), citing technical, logistical or financial problems.

◊ More and more non-commercial FM licenses. The two-year-trend is 3,614 to 3,860 to 4,019 – the first time the number of “non-commercial educational” FM licenses has exceeded 4,000. As for commercial FMs – there are 14 more than last year (now 6,612). Study the FCC’s latest Broadcast Station Totals report here.

◊ Hints of a new “Nash” appear in the new list of FCC call signs. But probably not on a 1550 AM talk station in Amarillo. It’s more likely that Cumulus is just parking the “KNSH” calls there for future use. No format change at the former KZRK Canyon, Texas, just new legal call letters. Also in the FCC’s new three-page list of call sign changes, Artistic Media Partners returns oldies WSSM Goshen (97.7) to its previous calls of WZOW. And around Baton Rouge, we have a rare simulcast of “W” and “K” stations. Guaranty was already simulcasting all-sports WNXX Jackson, Louisiana (104.5) on its Donaldsonville-licensed 104.9 – which changes calls from KYPY back to its earlier KNXX. So you’ve got WNXX/KNXX. That doesn’t happen too often. Play detective for yourself, and check the FCC’s latest list of call sign changes here.

◊ Catholic Radio Network of Loveland, Colorado prays for relief at the Commission and gets $800 worth. Lay-Catholic KPIO Loveland (1570) was chided in October 2011 for running over-power at nighttime and assessed a fine of $4,000. In its defense, the group cited a precedent with Queen of Peace Radio, where it says the FCC had cancelled forfeitures against non-profit entities that made good faith efforts to comply with the rules. But the FCC says that in this case, “we disagree” – because KPIO didn’t realize it had “far exceeded its authorized power” at night. Fixing problems after an FCC inspector points them out doesn’t win you any praise. But KPIO’s history of compliance, as you see here, trims the fine to $3,200.

Latest Fall-book Nielsen Audio results from diary markets.

Monterey-Salinas-Santa Cruz – Count it as 16 straight #1’s for rhythmic KDON, from a Spring 6.7 to Summer 7.9 and now Fall 8.9. Entravision’s regional Mexican “Radio Tricolor” KLOK-FM is second, 5.1-6.0-6.7, followed by Buckley’s AC KWAV, 4.6-5.4-5.0. Maple’s impossible-to-categorize alt-country/alternative KPIG is next, 4.3-4.6-4.2. All shares in this section are age 12+ AQH for the total broadcast week. Under Nielsen’s “subscriber only” policy, we’re able to see only the shares of the stations that subscribe. And you should know that the Fall survey ran September 12 through December 4. Today we’ve got a mixed batch of four-book markets and two-book markets -

Little Rock – The 10.0-share of Clear Channel’s country KSSN exactly matches its topline share from a year ago, and KSSN has claimed every book since then. Since the Spring, it’s gone 9.7-9.5-10.0. Second place is held by Cumulus’ urban “Power 92.3” KIPR, 8.1-7.1-7.6, and third place belongs to sister CHR “Alice” KLAL, 6.9-6.7-6.8. Another Cumulus station, hot AC “B98.5” KURB, cranks out its best share since Winter 2010, up 3.8-4.2-6.3. Clear Channel’s classic country “Wolf” KMJX drops 6.5-6.2-4.7. Only Clear Channel, Cumulus and the local Signal Media subscribe in market #84.

Des Moines – The “shocking” Summer-book 5.5 share you read about three months ago for Clear Channel’s heritage talk WHO has been replaced in the Fall book with a 7.5. That’s enough to make WHO #2, and it starts a new string for WHO. Before the Summer book, WHO had literally never dropped below the 7.0-share level. Its four-book trend for 2013 – 8.0-9.4-5.5 and now 7.5. While #1 for the second book in a row is Clear Channel sister CHR “Kiss 107.5” KKDM, 5.8-8.7-8.0-8.0. Cumulus’ country “Hawk” KHKI is again flying in third position, 7.2-7.3-7.4-6.7. CC’s variety hits “Bus” KDRB is fourth, 6.0-5.3-5.8-6.3. Cumulus all-sports “1700 the Champ” KBGG returns to the rankings with a 0.5, after dropping out in Spring and Fall. Only Clear Channel and Cumulus subscribe in Des Moines.

Greenville-New Bern, NC – NextMedia (soon to be Digity) and Beasley are the only subscribers, and the rankings begin with Next-owned country WRNS, 10.7-12.0-12.9. Beasley’s urban “Kiss” WIKS is #2, 10.1-9.5-9.7. NextMedia’s top 40 “Bob 93.3” WERO is third, 8.2-8.6-7.2. Next-owned “X” rocker WXQR has a nice book to live with for the next three months, up 1.2-1.7-2.8.

Spokane – For the second time in 2013, CC’s classic rock KKZX (8.0-9.3-7.9) and QueenB’s “Coyote Country” KXLY-FM (6.5-8.3-7.9) are tied for the 12+ lead. Third place goes to another country station, Mapleton’s “93.7 the Mountain/New Country” KDRK, 5.6-6.8-7.1. In talk, Clear Channel’s news/talk KQNT and QueenB’s news/talk KXLY swapped shows last year, with Sean Hannity going to KQNT and Dave Ramsey to KXLY. Leader this time, by 0.1, is KQNT, 3.4-4.4-3.9. KXLY’s move is 4.4-2.9-3.8. In sports, Mapleton’s “CBS Sports Radio 1510 KGA” returns to the book with a 0.5, after missing the Summer survey. QueenB’s “700 ESPN” KXLX rates a bit higher, 1.7-1.3-1.6. Clear Channel’s “Fox Sports 1280” KZFS and Coeur d’Alene-licensed “1080 ESPN North Idaho” KVNI miss the book this time. And now to the two-book-a-year markets, which see Spring and Fall surveys –

Wilmington, Delaware – Delmarva CHR WSTW enjoys its best share since Spring 2007. The recent trend - Fall 2012 6.3 to Spring 2013 7.5 to Fall 2013 8.5. Then we see Beasley’s AC WJBR, dropping about a share each of the last two books, 7.8-6.5-5.8 and Delmarva’s country WXCY, Havre de Grace, 2.9-4.4-4.0. In talk formats, there’s Delmarva’s news/talk WDEL (3.8-2.3-1.5) and Clear Channel’s talk WILM, 2.6-2.2-1.4.

Lancaster, PA – Country “I-105,” Cumulus’ country WIOV (8.2-9.3-8.8), loses its nine-book winning streak to Clear Channel’s top 40 WLAN-FM (7.1-7.6-10.5). That’s the first 12+ win for WLAN-FM since Fall 2008, and its largest share since Spring 2002. AC “101 the Rose” WROZ, owned by Hall Communications, blossoms 5.5-4.8-8.4.

Lincoln, Nebraska – Only NRG Media subscribes here, in the town that’s the ending point of the new Bruce Dern movie named “Nebraska.” But NRG should as happy as Dern is (finally) with the recent run of country “Froggy 98” KFGE, 7.7-9.3-10.5. That’s the largest 12+ share ever for Froggy. Hot AC “B107.3” KBBK appears next, 7.7-5.9-6.5.

A tug of war between owner and lender in New York state’s Southern Tier results in receiver Dick Foreman filing – pursuant to a court order – to take control of Pembrook Pines Inc. and Pembrook Pines Elmira. That follows three judgments obtained by lender ACM Browncroft Trust against Robert Pfuntner totaling $1,319,509. The Pembrook Pines Inc. stations include classic rock “98 Rocks” WQRS Salamanca and country “KZ102” WZKZ Alfred. And in the Elmira grouping, CHR WLVY Elmira and “today’s hot new country” WOKN, Southport (99.5). The court order allows receiver Foreman to file Chapter 11 (reorganization) petitions on behalf of the “relief defendants” and take other actions. As you can see in the court filing here, there’s the usual stuff about not interfering with the work of the receiver. The Elmira group was supposed to sold to Titan Radio for $2.75 million (October 1 NOW). But that transaction hasn’t closed.

Northeast of Atlanta, the buyer of Winder, Georgia-licensed WIMO (1300) promises more local news and talk shows, and even a daily show about local high school sports. The buyer is Atlanta-based Jeff Batten, and he tells the local Patch site that “a community station has to do more than say it’s a community station…it has to prove it to listeners through action and initiative.” Batten’s Barrow Radio Broadcasting is paying $111,500 to Country Road Productions. WIMO’s technical facility is 650 watts daytime/50 watts after sundown. The buyer and seller obviously trust each other, because the earnest money on the table is just ten bucks. Jeff Batten owns other Georgia stations such as news/talk WCHM Clarkesville (1490) and its translator at 96.7, news/talk WJRB Young Harris (95.1), and standards “Lake 97.5” (WJUL Hiawassee at 1230 plus a translator). Batten also owns the Atlanta Broadcast Institute and Batten Communications, which produces TV and radio programming. Jeff tells Patch editor Kristi Reed that “radio is still enormously important to small communities….if you love the community, the community will love you back.”

Don Curtis finds yet another translator to buy in his native North Carolina. This time it’s the construction permit for a future 99-watter at 93.1 licensed to Durham. Seller is the Georgia not-for-profit Community Public Radio, and it’s getting $130,000 from Curtis-owned Eastern Airwaves. Don Curtis is based in the Raleigh-Durham market and owns stations such as country WQDR (94.7). No indication yet what he plans to do with W226BV, which will either need to simulcast the main signal of an existing station or an HD Radio multicast signal, adding a new format to the market. Broker – Chicago-based Bob Heymann of Media Services Group.

“The Republican National Committee’s Obamacare radio ads are way less than meets the eye.” Looks like radio got a lot of digital ink, but a tiny amount of ad revenue out of the now-famous coordinated RNC buy in the home states/districts of eight Democratic Senators and four House members. Chris Cillizza at the Washington Post says “in New Hampshire, the ads, ‘savaging’ Senator Jeanne Shaheen had $20 dollars behind them. Yes, $20, not $2,000 or $20,000.” Same in Alaska, where the RNC bought one ad attacking Senator Mark Begich, paying just $30. Cillizza says “the RNC never had any intention of influencing actual voters through these ads…instead this was a free media play” to get publicity without spending more money than your average K Street lobbyist blows on a nice dinner.

“Gut check” requested by radio and other ad-driven media, about “spotting false weight claims.” Eve Reed writes at Wiley On Media that the FTC’s new “Operation Failed Resolution” has “sent letters to publishers, broadcasters and other media outlets, asking for their cooperation in screening ads for false and deceptive claims.” You know the rapid weight-loss claims that are “too good to be true.” As Eve says, the feds believe that “legitimate media outlets should want to avoid associations with others who commit fraud,” and that “an advertiser that is willing to cheat consumers is likely to cheat the media outlet by failing to pay its bills.” Way down the road, the FTC asserts its authority to actually prosecute media outlets – but it much prefers the path of cooperation.

“Unhappy with the Communications Act? Congress wants to know.” Pillsbury attorney Scott Flick says House Commerce Committee Chair Fred Upton and Subcommittee Chair Greg Walden just announced a White Paper about where things are now with the law, and soliciting input from the public about a possible re-write. Scott says the specific questions include how the current law (the Telecom Act of 1996) is structured around particular services, and whether the structure and jurisdiction of the FCC itself need to change. Comments are due back to the House by late January, as Flick explains here.

Bob Adams is the winning candidate in what Saga calls “a quiet search” to succeed its manager in Portland, Maine. Yesterday you read about Cary Pahigian’s “ticking biological clock” as he approached the 15-year mark in Portland. Now Saga says “we will sincerely miss Cary…he has been part of the fabric of Portland Radio Group for such a long time.” But it says it started looking for a new manager after he talked about his desire to leave, and agreeing to wait until there was a replacement. That turns out to be Bob Adams, who previously managed in Portland at adult alternative WCLZ (98.9). He’ll be coming back – in the teeth of a cold Maine winter – from managing for Cumulus in Lancaster and York, PA.

Bob & Tom replace John Boy & Billy on classic rock WIXV Savannah (95.5). Behind the scenes, this appears to be Cumulus changing out a Premiere-syndicated show (John Boy & Billy) for a morning show Cumulus has a connection to. Bob & Tom are still based at Clear Channel’s classic rock WFBQ Indianapolis (94.7), but as of January 1 they took over their own syndication, in collaboration with Cumulus and their agent, Miller Broadcast Management. “Rock of Savannah” WIXV had used John Boy & Billy for many years. Will Cumulus make similar adjustments elsewhere? As Lew Dickey says, they prefer their own cooking, keeping it in the family, wherever possible.

Greg Lane just found out he’s being replaced as the night jock on Cumulus’ Fresno “Kiss Country 93.7” KSKS by the company’s new “Nash Nights Live with Shawn Parr.” Rick Bentley at the Fresno Bee makes the layoff of the 23-year Kiss personality the lead item of his radio/TV column. Greg says “It feels like someone called and said that my best friend had died. I’m in shock. It hurts to the very core of my existence.” Bentley says Lane played a key role in keeping KSKS connected to Nashville and the music industry. Though Lane says “I don’t blame Cumulus.”

Michael Kempner led the early-2011 buyback of the MWW public relations agency from the giant Interpublic Group, and was named Agency Leader of the Year by PR News. In public service, he’s been on the White House Council for Community Solutions and the Dean’s Advisory Committee of the American University School of Communications (at his alma mater). Now Kempner’s been nominated by President Obama to the Board of Broadcasting Governors, which oversees operations such as the Voice of America, Alhurra TV and Radio Sawa, Radio Free Asia, and Radio and TV Marti. The BBG board is authorized for nine members, including the current Secretary of State.

Funny stuff - A NOW reader swears he heard this from the former GM at a station in the Southeast. "The guy told me that one day, back in the 1970s his kids came home and said their next-door neighbors, with whom they were friendly, had received some funny-looking diaries in the mail. This GM apparently wrestled his conscience to the ground, went next door, rang the doorbell, and said 'Helloooo, you've just won a wonderful steak dinner out for your entire family.' He had somebody inside his company fill them out so they wouldn't look suspicious. There was no all-day listening from 6am to 11pm, or anything that might have triggered alarms at Arbitron for excessive listening. The diaries went back in the mail, and that GM's station had a very good book. Of course the problem with doing that is the next book, when you will probably drop for no visible reason. But this GM was taking it one day at a time, and he didn't look the gift horse in the mouth. Great guy, but I was surprised he did it – and then told me about it.” Want to share your own true radio story, about ratings, programming, sales, engineering, ownership? Email “You Can’t Make This Up” - Tom@RTK-Media.com.

The Polar Vortex may be gone, but make sure your this daily NOW newsletter doesn’t get sucked into a different vortex - for email . Remember to add RadioNews@TomTaylorNow.com to your address book, to white-list it, or otherwise make sure your mail welcomes the early-morning newsletter. Delivery chains between us and you are dynamic, changing all the time. Got a product or service to promote, or need to fill a job with a quick classified ad? Our Kristy Scott can help. She's at Kristy@RTK-media.com or phone 818-591-6815. Hope you very much enjoy your weekend – see you Monday. Tom

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